Oral Judgment: (D.G. Deshpande, J.)

1. Heard Counsel for the petitioner and the learned APP for the State.

2. This petition was earlier before the Bench of Ranjana Desai & D.B. Bhosale, JJ. Since they passed an order "Not before this court, as Honble Smt. Justice R.P. Desai is a member", this Petition is assigned to us, by theing Chief Justice.

3. The prayer in this petition is to quash and set aside the order of freezing the Bank accounts and Bank lockers of the Petitioner and his family members by the Police officers in this case and to defreeze all the accounts at (Exhibit A) and permit the petitioner and his family members to operate all those bank accounts as per Exhibit A and the bank lockers. As per affidavit of Rajendrasinh Govindsinh Pardeshi, Assistant Commissioner of police, attached to Anti Corruption Bureau, Mumbai, filed in reply to this petition, he has stated that C.R. No. 33/2002 was registered against the petitioner and others for committing mal practices pursuant to criminal conspiracy hatched for the benefit of unmerited candidates, who paid huge amounts for getting success in the MPSC (Main) Exam. 1999 for Recruitment of Asstt./Sales Tax Inspector / PSI. During investigation of that C.R., house search of the petitioner was conducted which resulted in seizure of incriminating documents revealing accumulation of huge assets by the petitioner in his name, in the name of his wife and children. This search was on 8.7.2002. On and from 6.9.2002 an open enquiry was initiated against the petitioner regarding possession of disproportionate assets by the Investigating Officer on C.R. No. 33/2002. This Investigating / Enquiry Officer completed the enquiry and submitted his final report as a result of which on 21.12.2005, C.R. No. 37 of 2005 under Section 13(1)(e) r/w. 13(2) of the Prevention of Corruption Act, 1988 and Section 109 of Indian Penal Code, was registered against the petitioner and his wife.

4. In the meantime i.e. in between 8.7.2002 to 6.9.2002 (as it appears from the wordings of the affidavit of ACP attached to Anti Corruption Bureau) the Investigating Officer gave a letter under Section 102 of the Cr.P.C. to stop operation of the bank accounts held in Allahabad Bank in the name of the petitioner and his family members:

(i) Shashikant Dattatraya Karnik S.B. A/c, No. 50717

(ii) Sharmila Shashikant Karnik S.B. A/c. No. 52539,

(iii) Shubhada Shashikant Karnik S.B. A/c. No. 4971

(iv) Shashikant Dattatraya Karnik PPF A/c. No. 3237 Union Bank of India,

(v) Sharmila Shashikant Karnik Saving & Pension A/c. No. 121975 Bank of Baroda.

5. However, it appears that subsequently all the accounts mentioned in Exhibit A to the petition were brought under those instructions or directions i.e. directions to the effect that the petitioner and his aforesaid relatives shall not be permitted to operate accounts. It is this action of the police / respondents, that is, being challenged in this petition.

6. It needs to be clarified that so far as the pension account of the petitioner and his wife are concerned, the petitioner himself has stated that the Special Court allowed the petitioners prayer and permitted him to operate those pension accounts.

7. The matter was heard by us on 9.4.2007. We passed an order on the basis of the statement made by the learned APP and permitted the petitioner to operate four accounts from out of all those accounts under Exhibit A to the petition, which accounts are as follows:

(i) Dr. S. D. Karnik Indian Bank, Mahim Branch A/c. No. 18699

(ii) Dr. Sharmila S. Karnik Bank of Baroda, Marine Drive Branch A/c. No. 12748

(iii) Mr. S. S. Karnik Bank of Baroda, Marine Drive Branch A/c. No. 13068

(iv) Mr. S. S. Karnik Bank of Baroda, Marine Drive Branch NRE A/c. No. 107913

8. In this background, this petition is filed challenging the order or direction or whatever that may be, because in the second affidavit filed by the same A.C.P. in this petition on 17.3.2007 in paragraph 4 it is stated that only letters were issued to the various banks by the then investigation officer not to permit operation of the said accounts, however, those bank accounts were neither attached nor it was reported to the concerned Court, being the property of the offence and what was prohibited was only the operation of the bank accounts.

9. When questioned in this regard specifically, the learned APP tendered before us (i) letter dated 2.9.2002 written by S. B. Pujari, Assistant Commissioner of Police, Anti Corruption Bureau, BMU, Mumbai, wherein there is reference to three accounts of Shashikant Dattatraya Karnik, Sharmila Shashikant Karnik and Shubhada Shashikant Karnik about S.B. A/c. Nos. 50717, 52539 and 4971 respectively. The Bank Manager is asked to stop the operation of the above mentioned accounts. This was in connection with C.R. No. 33/2002. There is no mention of any section of Cr.P.C. in this letter under which the directions are given; (ii) letter dated 29.1.2007 written by the Deputy General Manager of the Union Bank of India to Mr. J. D. Virkar, IPS, Director General, ACB dated 29.1.2007, in that letter the Bank has informed the Director General that Dr. S. D. Karnik has filed a complaint before the Consumer Disputes Redressal Forum for wrongful freezing of the accounts. The bank has further informed that the bank has stopped withdrawal from the account of Dr. S. D. Karnik pursuant to the instructions in their letter dated 17.11.2005. The Bank therefore wanted to ask and learn whether prohibitory order is withdrawn or not, and (iii) Letter dated 17.11.2005 written by Mr. S. B. Pujari, Assistant Commissioner of Police to the Assistant General Manager, Union Bank of India, and bank was requested not to allow withdrawal from the said P.P.F. A/c. No. 3237 by S.D. Karnik - the petitioner herein.

10. It will therefore be clear from the aforesaid correspondence and submissions made that out of 10 accounts of the petitioner (the petitioner refers hereinafter to all his relatives whose bank accounts are allegedly frozen). There is an order only in respect of 3 accounts with Allahabad Bank, 1 account with Union Bank of India and operation of the other bank accounts is by oral instructions only and none of the two affidavits are clear in this regard.

11. Mr. Sawant, Senior Counsel for the petitioner contended that the entire action of the respondents either in issuing the aforesaid letters or issuing the oral instructions, is totally illegal and is liable to be quashed. He drew our attention to Section 102 of the Cr.P.C. in that regard, however, did not dispute now as per the position of law stands that bank accounts could be seized under the provisions of Section 102 of Cr.P.C. Section 102 is reproduced hereunder:

"102. Power of Police officer to seize certain property.

(1) Any police officer may seize any property which may be alleged or suspected to have been stolen, or which may be found under circumstances which create suspicion of the commission of any offence.

(2) Such police officer, if subordinate to the officer-in-charge of a police station, shall forthwith report the seizure to that officer.

(3) Every police officer acting under sub-section (1) shall forthwith report the seizure to the Magistrate having jurisdiction and where the property seized is such that it cannot be conveniently transported to the court, he may give custody thereof to any person on his executing a bond undertaking to produce the property before the court as and when required and to give effect to the further orders of the court as to the disposal of the same."

12. According to Mr. Sawant, before taking any action under Section 102 of the Cr.P.C. three things are required to be fulfilled. Firstly, the police officer should come to the conclusion that the property that is the accounts to be seized should be alleged or suspected to have been stolen or which may be found under circumstances which create suspicion of the commission of any offence.

Secondly, the police officer if subordinate to the officer in charge of the police station has to report the seizure to the officer in charge; and thirdly every police officer acting under sub section (1) has to mandatorily report the seizure to the Magistrate having jurisdiction.

13. Mr. Sawant, therefore contended that till this date the police officers have not been able to show any connection between the accounts frozen (the word "frozen" is used to indicate the action of the police to stop operation of the account and the so-called alleged offence of disproportionate income). Secondly, according to him the officer who passed that order i.e. Mr. S. B. Pujari, ACP and I.O. Anti Corruption Bureau, Mumbai, was not authorised to do so and even if he was authorised there is nothing on record to show that he made a report to his superior in the Anti Corruption Bureau. Thirdly, according to Mr. Sawant, the fact of seizure or freezing the accounts was not communicated or reported to the Magistrate and therefore in view of these three illegalities, the order of freezing of the accounts, is liable to be quashed and set aside.

14. In this regard and to support his contention, our attention was drawn by Mr. Sawant, to the second affidavit of Mr. Pardeshi, ACP attached to Anti Corruption Bureau dated 17.3.2007. In paragraph 4 the deponent has stated as under:

"I state that although the charge-sheet has been filed against the petitioner in C.R. No. 33/2002, only letters were issued to the various banks by the then investigation officer not to permit operation of the said accounts, however, those bank accounts were neither attached nor it was reported to the concerned Court, being the property of the offence and what was prohibited was only the operation of the bank accounts.

15. Our attention was also drawn to paragraph 5 of the said affidavit, wherein the deponent has stated as under:

"I state that investigation in respect of the disproportionate asset of the petitioner resulted in registration of the offence vide C.R. No. 37/2005 pursuant to the enquiry held earlier. I state that in respect of the said C.R. charge-sheet is yet to be filed and therefore that the amount which is held by the petitioner in various banks accounts has not yet been attached.

However, only to secure the same, operations of the bank accounts were stopped. I state that the decision as to whether the amount lying in the Bank is out of disproportionate income of the petitioner and whether the same is to be seized and is to be reported to the Magistrate will be taken after completion of the investigation and filing of the charge-sheet and as on today the investigation is in progress."

16. When confronted with these two portions of the aforesaid affidavits, Mr. Mhaispurkar, agreed and admitted that what is stated is true, he also stated that till today the Authorities have not decided or had not come to a conclusion that the amount in the bank accounts is in connection with the case of the disproportionate assets.

17. Re-reading of Section 102 of the Cr.P.C. shows that what is permitted to be done is the seizure of the property by the Police Officer. Now, as per the view of the Supreme Court, bank accounts can be seized under Section 102 of the Cr.P.C. There is no doubt about that, and, since they are bank accounts, the seizure means their attachment by the police and the attachment order of the bank accounts will have the effect of stopping the account holder from operating those bank accounts. But in any case when the powers are to be exercised by the police officer under Section 102 of the Cr.P.C. and they are so exercised, there is nothing like giving oral instructions of stopping the operation of the account or written instructions not to allow operations of the accounts. If such instructions are given either oral or in writing then they are to be regarded as attachment of the account. Therefore, what is stated in the aforesaid affidavit of Mr. Pardeshi, as quoted above, is an attempt to escape from the consequences of non compliance to the section 102 of Cr.P.C. No other provision of the Cr.P.C. was shown to us by Mr. Mhaispurkar which empowers the police officer, firstly, to issue orders oral or written of stopping the operation of account before attachment or seizure and then pass second order of attachment of account. There is nothing like empowering the police officers to issue ad interim or temporary order of stopping the operation and then final order of attachment of the account. If they issue any order of stopping operation of the account, it has to be treated as action under Section 102 of the Cr.P.C. resulting in seizure i.e. attachment of the account, and, if that is so the compliance to all the three requirements, is a must.

18. So far as requirement under section 102 (1) is concerned, it is obligatory upon the police to show that the property which they want to attach or attaching is under circumstances which create suspicion of the commission of any offence. From paragraph 5 of the affidavit of Mr. Pardeshi, ACP attached to ACB, quoted above, and from the oral submissions made by Mr. Mhaispurkar, it is clear that till this date the authority who attached the accounts of the petitioner have not been able to come to any conclusion, even primafacie case that the amount in the accounts has any connection with the offence of disproportionate income of the petitioner. In these circumstances, there is no option but to hold that any action taken in giving oral instructions of stopping the operation of the account or in issuing written directions of stopping the operation of account, is illegal perse. Section 102 of the Cr.P.C. does not permit any police officer to seize the property, viz. to attach the account in the first instance and then to decide whether the property has any connection with the commission of any offence. The attachment orders oral or written in this case are issued in 2002, we are in 2007, but till this date investigating agency has not been able to come to a conclusion, as stated in paragraph 5 of the affidavit reproduced above, that the amount lying in the bank accounts, is out of the disproportionate income of the petitioner. In these circumstances, the entire attachment under oral or written directions has to be struck down as has been illegal.

19. Second requirement of Section 102(2) of Cr.P.C. is that the officer seizing the account or attaching the account subordinate to the officer in charge of the police station has to forthwith report the seizure or attachment to his superior i.e. to the officer in charge of the police station. Even though the State has filed two affidavits of Mr. Pardeshi, ACP of Anti Corruption Bureau, not a word is uttered about this requirement of sub section (2) of Section 102 of Cr.P.C. that the officer ordering attachment of the accounts oral or in writing whether was subordinate to the officer in charge of the police station, meaning thereby whether any superior officer was there in the Anti Corruption Bureau above him and there was any report by the said officer to his superior. What is stated in paragraph 6 of the first affidavit of Mr. Pardeshi is that "..on completion of the open enquiry, the Enquiry Officer on 23.8.2005 submitted his final report". This is not the compliance to sub section (2) of Section 102 of Cr.P.C. If the Officer giving instructions of stopping the operation of the account of the petitioner to a superior, then it was necessary for that officer to report this matter to his superior as required by sub section (2) of Section 102.

20. Third requirement of Sub Section (3) of Section 102, lays down a mandate that every police officer acting under sub-section (1) shall forthwith report the seizure or attachment of accounts to the Magistrate having jurisdiction. Admittedly, this is not done in the present case. Paragraph 5 of the second affidavit of Mr. Pardeshi, quoted above is very clear in this regard as well as the oral submission of Mr. Mhaispurkar. It will be therefore clear that there is absolutely no compliance to any of the provisions of sub sections (1), (2) and (3) of Section 102 of Cr.P.C, in this matter. Consequently, the petition is required to be allowed and the orders are required to be quashed as prayed.

21. Mr. Sawant, drew our attention to the Judgment of Madras High Court reported in 2003 Cri. L. J. 2779 B. Ranganathan vs. State and others wherein there is reference to the judgment of the Supreme Court reported in (1999) 7 SCC 685 [LQ/SC/1999/886] State of Maharashtra vs. Tapas D. Neogy.

22. Madras High Court in paragraph 19 held that:

"A case of disproportionate wealth could only be proved from the entries effected in the books of accounts so as to trace the past bank dealings of the accused and of his near relatives during the check period but not freezing the accounts unless the Investigating Officer is of the view that by permitting the accused or his relatives to continue to operate the accounts any damage would be caused to the entries already effected in the past which are relevant for the check period."

23. We are aware that in the judgment of the Supreme Court in the case of State of Maharashtra vs. Tapas V. Neogy, the Supreme Court has observed in paragraph 12 the underlying object of Section 102 of Cr.P.C. was to empower the court to get the said money which has any direct links with the commission of the offence committed by the accused as a public officer. The Police officer in course of investigation can seize or prohibit the operation of the said account if the assets have direct links with the commission of the offence for which the police officer is investigating into.

24. It may be true that in view of the judgment of the Supreme Court, attachment of accounts or prohibitory order regarding restraining operation of account in cases of disproportionate assets of public officers is necessary in view of the provisions of sub section 2 of Section 13 of the Prevention of Corruption Act, 1988, so that the court can impose adequate fine taking into consideration the amount or value of the property but sine-qua-non for exercising power under Section 102 of Cr.P.C. firstly coming to a conclusion that the amount i.e. the assets therein have direct links with the commission of the offence, viz. for offence under the Prevention of Corruption Act.

25. In the present case, till today the police officers have not been able to come to any conclusion either prima facie or ultimate conclusion in this regard and therefore allowing any further restrictions upon the petitioner regarding the operation of the account, would be totally illegal.

Since in the petition, act of the respondents has been regarded by the petitioner as totally illegal and non compliance with section 102 of the Cr.P.C., it was obligatory upon the respondents to state on oath clearly and specifically whether they had complied with provisions of sub section 2 of Section 102 of the Cr.P.C. No light is thrown by the respondents in their affidavits in that regard.

26. As regards the requirement of sub section (3) of Section 102 of Cr.P.C., there is a clear cut admission that the concerned Magistrate having jurisdiction has not been informed about this action. The petitioner cannot be permitted to get any protection in this regard on their alleged contention that so far as there is no order of seizure and only operation of accounts is stopped. This is nothing but an attempt of making jugglery of words. Stopping the operation of account and attachment or seizure is going to have same effect on the petitioner because in any case he will not be in a position to operate the accounts and as already held by us above that the police officer have no power to pass any interim or ad interim orders initially and then confirm them by final order.

27. Fourth requirement of law though not specifically laid down in Section 102 of Cr.P.C. is that before issuing orders of stopping the operation of account, notice is required to be given to the petitioner. If attachment order or any order of the aforesaid type is bound to effect adversely and seriously to the holder of the account, then it was obligatory and necessary for the police to give him notice before doing that and in case the police apprehended that such a person like petitioner would, after receiving the notice, withdraw all the amount, they could have given notice to him and attached the accounts simultaneously. Nothing has been done in this regard. It is therefore clear that there is strong and valid force in all the four submissions made and the grounds raised, the entire order is totally illegal and perverse. There is absolutely no compliance to Section 102 of the Cr.P.C.

28. In the result, we pass the following order:

ORDER

The petition is allowed in terms of prayer clause (a) in respect of all the accounts mentioned in Exhibit A of the petition.

No order as to costs.